Draft White Paper on Science, Technology and Innovation: DST briefing; BRRR

Science and Technology

24 October 2018
Chairperson: Ms L Maseko (ANC)
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Meeting Summary

The Department of Science and Technology’s (DST’s) senior management team discussed the draft White Paper on science, technology and innovation, which was at an advanced stage of amendment and sign-off. The presentation provided feedback on how far the process was with regard to the motivation and context of the draft White Paper, and provided proposals for its implementation. The final public consultation process had been earmarked for a summit on 9 November in Pretoria.

The DST pointed out that the White Paper came at a time where there were global shifts in technology advancement. The national system of innovation still needed to be amended to assist South Africa in dealing with basic service delivery issues. Collaboration with Brazil, Russia, India, China and South Africa (BRICS) had had positive spin-offs in the area of science and technology initiatives.

The National Advisory Council on Innovation had played a pivotal role in the foresight research review which was likely to be completed by March or April 2019. This had been presented to Cabinet, which had requested another round of consultation on the document. The Ministerial review of the National System on Innovation had been completed, and the landscape review of science and technology was still being analysed by the DST.

Support for working with industry had grown through the introduction of research and development tax incentives, but a platform was still required to set the agenda for science and technology, and the national system on innovation needed to improve the lives of more South Africans. There needed to be knowledge about innovation in all spheres of government, which had to begin thinking about ways of being modern to encourage more technological and innovative solutions to transform society for the better.

Policy proposals in the White Paper requested a Presidential summit on science and innovation on an annual basis, where the Minister of Science and Technology would convene ministers with science-related areas to commit towards a science and technology compact, and use the digital space to engage more closely as government.

The National Advisory Council on Innovation (NACI) review of the White Paper had highlighted weaknesses and threats, and Members wanted to know about the concerns regarding poor primary and secondary education and the low levels of literacy. Could a model for future government of science and technology emerge from the White Paper?  They also wanted to know the role of civil society in the area of science and innovation. They suggested establishing innovation hubs in all the provinces to help small businesses to grow and gain access to markets.

The Committee concluded by considering amendments to the White Paper, and the draft was adopted.

Meeting report

White Paper on Science, Technology and Innovation: DST briefing

Dr Phil Jwara, Director General (DG): Department of Science and Technology (DST), outlined the motivation, context and process followed in the drafting of the White Paper, as well as a summary of the proposal and the extent of the public consultation process, including the summit scheduled for 9 November in Gauteng.

It had been 22 years since the White Paper was adopted by government and since then there had been global changes and global trends in technology. Governments in other parts of the world were developing policies that would be informed by technological and global megatrends and standards in the field of technology and innovation. There had been good progress made in the development of the White Paper, though a number of challenges had been highlighted in this regard

Through this process, there had been a number of reviews by the DST in the ongoing work of finalising the White Paper and looking at other science, technology and innovation intensive developments. The national system of innovation, coined in the 1996 White Paper, had not been fully achieved in assisting South Africa to deal with the socio-economic challenges. There were global trends and shifts happening across the world, from the geopolitics and global shifts point of view, and migration in Europe and Africa was beginning to make people think differently. When developing the White Paper in 1996, it was not foreseen what China becoming a global superpower and the formation of the Brazil, Russia, India, China and South Africa (BRICS) organisation would mean.

Because of environmental deterioration, there had been food, water, land and energy challenges worldwide and global commitments towards the sustainable development goals, fundamental changes in the world of work, and public discussion on the fourth industrial revolution and green technologies. Therefore one needed to take advantage of such change.

Dr Jwara said that the process followed in drafting the White Paper was a review which was done by the National Advisory Council on Innovation (NACI), looking at broader future areas of technology in detail and what they mean for South Africa, and this work would be completed towards March or April 2019. The foresight information would assist the Department as part of the framework for the White Paper, ensuring that consultation was happening to look at the socio-economic impact for society. This had been presented to the Cabinet cluster, which had agreed that there should be another round of consultation on the document.

There had been a number of reviews on the performance of the National System of Innovation
(NSI) -- by the Organisation for Economic Cooperation for Development (OECD) in 2009, and the ministerial review done in 2012. The National Advisory Council had reviewed the White Paper and NACI had provided a review of the performance of the system. At the moment, the review of the science, technology and innovation institutional landscape phase 1, known as STIL, was a comprehensive engagement.

Dr Jwara said there was more information from the NACI and the DST which highlighted progress made since 1996. The DST had started by looking at the institutions that had been established to drive policy recommendations from 1996. The National Research Foundation (NRF) had been established before it was the Foundation for Research Development, and had set up the Technology Innovation Agency (TIA) in 2009. The Space Agency and the Intellectual Property Management Office had a good relationship with science and technology intensive departments, and had regular interaction with the Departments of Higher Education, Mineral Resources, Energy, Trade and Industry, and Agriculture, Forestry and Fisheries, to assist them in modernising agriculture using research, development and innovation.

Support from industry had increased for the sector innovation funds and for research and development (R&D). However, at the highest level there was currently no platform for setting the agenda for science and technology, engaging the national system of innovation in South Africa, which had not yet reached its potential for improving the lives of South Africans.

On knowledge utilisation, there was currently no overarching innovation policy framework. One needed to talk about innovation across all spheres of government, as the innovation performance had remained relatively flat if it was measured by patents and the number of innovations. High technology exports had not been many, and global competitive rankings for global innovation showed some decline over a 10 year period.

The DST acknowledged an increase in the work of the National Science Innovation (NSI) in assisting the government in decision making. For instance, the data from the space agency was used for monitoring the elections and the growth in human settlements in areas that were not meant for human settlements. The data collection had been helpful for decision making in appropriate departments, but there had not been a lot of improvement in government service delivery through innovation, and proposals had been made in the White Paper in this regard.

There should be systems in place to ensure that South Africa could use technology to fast track service delivery, such as renewing one’s licence through the eNatis system, which would ensure less frustration for society. The government also needs to think about including the digitisation of data from patients.

A start had been made to harness military technology to redirect it for peaceful use, using innovation to enhance society. Innovation, technology and communication advances could be used to provide services to under-developed areas, and this would also require other departments to be involved. There had been an increase in the number of start-ups since 2011 in science and innovation. Most were from the publicly financed institutions, and they needed to ensure that they contribute towards economic growth and development.

Dr Jwara illustrated how the Finland government had embraced modern technology, including biotechnology and environmental technology. Even South Africa could modernise sectors through modern technology.
The keen interest in engineering had also led to an increase in the number of maths and science learners taking post-school degrees, and full time researchers had increased. There was a need for female and black researchers to be increased. The gross expenditure on R&D was receiving more funds, and more foreign university students were entering the system. There had also been an increase in the number of academic papers from 2005 as a share of knowledge which had been written, published and reviewed by academics in the field of science and technology.

He described the system which compares the number of researchers from each country that contribute to knowledge production, indicating the number of Ph Ds was growing. The budget spent on research infrastructure had declined a bit, but was still sizeable.

The presentation was intended to make the Committee aware of work being done by the DST. It was engaging in technical consultations with businesses, some organisations in civil society and small medium enterprises (SMEs), higher education institutions, and science councils. The White Paper had been subjected to two panels of critical reviewers in January and November 2017.

The vision of the new draft White Paper was to enable inclusive, sustainable and economic South African development in a changing world. The objective was to strengthen the culture of science and technology in the country to create an interest in science engagement across the country. This document would ensure that the advocacy work continued and having made an amendment to the Bill, the NRF would ensure its successful institutionalisation within the South African Agency for Science and Technology Advancement (SAASTA). There was a partnership with the Centre for Public Sector Innovation around introducing innovations within the public sector, creating an enabling and inclusive governance environment, facilitating innovation to transform the innovation landscape, increasing the function of the NSI and the human resource space, expanding the research system and looking at how the institutions had been configured. The first phase had started and would be completed next year. There was a need to increase the funding model for innovation issues.

To address the national system of innovation governance, the DST proposed an annual plenary on science and technology and innovation be convened by the Presidency, bringing in business, civil society and government. The Minister of Science and Technology would convene ministers who had science and innovation branches within their departments, to adopt a compact on innovation across government to approve the funding and plans for innovation. It was hoping the NACI would support the Inter-Ministerial Committee on science and technology initiatives on innovation, and the forum to be launched, and digitalisation to help share information and increase the mobility of staff across the NSI.

There had been an increase in start ups in public finance institutions to benefit women and youth, and the funding of the technology innovation agency needed to ensure government directed the shareholding into blacks and youth, and small and medium women-owned enterprises. The ministerial review committee of 2012 had looked at the issues of the economy that were STI intensive, and had found a way for the economic cluster to discuss them. It had been felt that if there were social issues, and education was impacted, this would need intervention from the DST to work jointly, especially planning for the fourth industrial revolution. The Department of Telecommunications was involved in this, having coordination in the sector by developing sector science forums that supported business and civil society, including grass roots innovation, which was a proposal made in the White Paper.

The policy focus on science and innovation would be broadened beyond research and development to support localisation programmes driven by government, and increase provincial and local level innovation particularly in cities. The World Bank report indicated that South Africa needed to involve municipalities and metros as growth points, using innovation improvements across the state. For example,  5% of provincial budget provinces could be earmarked for innovation, there could be innovation hubs across all provinces to improve service delivery, young people could be taught coding, mobile applications could  support grassroots and social innovators, the technology of SMME’s could be strengthened to access markets, and there could be integration of innovators and partnerships with global companies.
 
Dr Jwara said there was a new automotive programme, and to increase the local content, manufacturers would need to adopt locally developed technology and enter new markets. This would require expanding and transforming human resources and building a science knowledgeable base, developing appropriate technical skills, retaining researchers in the science system and partnering internationally and with the rest of the continent.

The DST had not unlocked the potential of historically disadvantaged individuals (HDIs). There was a study on the ‘silent majority’ which would be shared with the Portfolio Committee.

It was looking at an increase in investment as a percentage of gross domestic product (GDP) from 0.78% to 1.5% over the next decade. It had started a sovereign innovation fund and was looking at other funding sources in the private sector from corporate social investment (CSI) sources and intensive science and technology departments. There was a need to increase funding to local government and for more investment in incubators and grassroots entrepreneurs in local areas, to go beyond what national departments do. R2 billion was targeted for small enterprises, and the Department would like the STI intensive departments to set aside budgets for more investment in infrastructure.

Foreign direct investment (FDI) that had a science and innovation focus should be promoted, and multi-national companies targeted. More support was needed from development finance institutions such as the Industrial Development Corporation (IDC) and the Development Bank of Southern Africa (DBSA). Funding instruments had to be harmonised to improve their efficiency across departments, working on a budget coordination system for the allocation of resources.

The implementation of the draft White Paper would be done through a series of ten-year plans, informed by foresight studies, performance reviews and consultation with implementing partners. The DST was now on the last leg of the public consultation process, and had disseminated the draft White Paper, and some media coverage had been given to the summit planned for 9 November. The Department had received 54 substantive inputs and were currently going through them and extracting key recommendations. It expected senior representatives from all spheres of government, including the diplomatic corps, to get the conversation on science and technology going, and high level experts should take three to four weeks to finalise the document by the second week of December.


Discussion

The Chairperson re-affirmed that the Department of Science and Technology was the anchor department within government and for innovation, research and development, and it could assist any other department to grow and be aligned to the National Development Plan.

Mr N Koornhof (ANC) asked about the growth in infrastructure investment, as the presentation indicated that from 2014 to 2016 there had been an increase every year, then a severe drop. He wanted to know in which fields those investments were made during those three years, and whether the decline would have a negative impact. The NACI review of the White Paper dealing with weaknesses and threats had expressed concern over poor primary and secondary education and low levels of literacy, and he asked if a model for future governments of science and technology could emerge out of the White Paper. Could the Department influence the new President for it to be a standalone department?

Ms T Motshidi (DA) wanted to know about investment incubators at grassroots level and how the Department of Science and Technology would relate to people on the ground. More interaction was required with municipalities. Which municipalities had been engaged? Which departments could relate to science and technology at local government level? Were the 54 substantive inputs representative of the demographics? How far was the Department in getting journalists to buy into the innovation space vision? How did the Department balance innovation and taking jobs from people?

The Chairperson then said that more departments that were science and innovation intensive had made a commitment to the White Paper. It linked well when involving different departments that may be able to complement each other, including the Department of Trade and Industry. He wanted to know if all departments were aware of the White Paper, and if they could buy in to science and technology.

Ms N Ndongeni (ANC) asked about the performance of the National System on Innovation (NSI) on knowledge generation. Why had the number of science, technology and engineering (STE) researchers declined from 12 102 in 1996, to 11 644 in 2016?

DST’s response

Dr Jwara the huge growth in infrastructure investment was in all fields of research. There was a feeling that investment was required for cyber infrastructure, for the universities to be able to communicate, and in new areas at the Council for Scientific and Industrial Research (CSIR) and at MINTEK. Investment had stabilised in higher education and research institutions. The centre for high performance computing was currently being upgraded to keep up with the demand.

The Square Kilometer Array (SKA) funds were also part of the investment, and that budget would decline as it became more operational over time. However, the Department should request a budget increase that was above inflation to expand the research capabilities in key disciplines, such as new platforms in precision medicine and biotechnology.

On the National Advisory Council on Innovation (NACI) review, Dr Jwara said that it would be a biased view from the DST, but at the moment the Department was using its influence and skill in piloting programmes with other departments and getting them to work together in partnership with the Department of Basic Education (DBE) to introduce information communication technology (ICT) in schools, to assist in improving science, engineering, mathematics and technology. The challenge was how the pilot programmes could be integrated into the mainstream. The future configuration had not been discussed in detail – the Department was awaiting political structures to work on the best configuration for the country.

Regarding investment in incubators at the local government level, the DST had signed a Memorandum of Understanding with the South African Local Government Association (SALGA), and had also signed an agreement with the Department of Cooperative Governance and Traditional Affairs. The purpose of both initiatives was to look for innovations that could have an impact at the local community level that could be rolled out.

There were a few projects working at the local level. The Department had worked with 23 municipalities that were identified by the Department of Cooperative Governance and Traditional Affairs that needed decision support, and had completed a report on the programme called the “Innovative Rural Development Programme.”  For example, there was a programme in the Eastern Cape on how to use hydro-power to support and provide electricity in a rural setting.

In the North West Province, the Department had used locally developed hydrogen in fuel cells for electricity in a school. In collaboration with the University of Stellenbosch, it had rolled out the use of ICT and energy to provide access to payments through Nedbank in rural areas. However, the DTI could not roll all the programmes out, hence the proposal of the White Paper was to ensure more partnerships with municipalities, and hopefully that could be achieved in the innovation compact.

The other possibility was to look at the municipal infrastructure grant (MIG) to be earmarked for alternative innovation solutions in rural settings in order to improve people’s lives. The White Paper was looking at earmarking budgets, and working with institutions in partnership with local government.

On the training of researchers, Dr Jwara said that journalists had been trained in 2004 on science, and after that they had been re-trained to do other work not related to science and technology. There had been an agreement in place which was not followed up. There were currently around 300 journalists being trained in the local setting to share the role of science and technology. The Department could provide more details in this regard.

Regarding the dichotomy between job creation and innovation, he said that in some instances the introduction of innovation had a multiplier effect, especially in manufacturing. Introducing science and technology in downstream activities could add more jobs, although the jobs would not be the same. Society needed to accept new technology, an example being the change from the old big cellphones to the small sizes, and the impact on the working class. A report would be presented to the Human Sciences Research Council (HSRC) and to the Portfolio Committee once it was completed.

On the issue of budgets, Dr Jwara said the Department was a luke warm towards other departments wanting to make use of a slice of its budget. They were willing as long as the money was earmarked to fund projects involving science and technology. For instance, to modernise agriculture one had to invest in science and innovation and use the latest technologies for water and application of fertiliser. Satellite technology could identify efficiencies in agriculture.

The Department had started a process of budget coordination with other departments in order to have a framework for budgets earmarked for science councils. Those that were reporting outside the Portfolio Committee could be monitored from a single source through having a single science budget vote, as had been the position before. It had been abolished in 2005, but he still thought it was a good idea to be brought back.

Regarding the decline in the number of full time researchers, the concern was that the country was not increasing the number of people working on research and development across the system. The Department was not yet sure how many people with Masters and Ph Ds were in the private and public sectors. Growth was required in the academies, and so the Department of Higher Education had rolled out the next generation of academics programme. The biggest challenge was that the public sector was not absorbing enough Ph Ds.

Mr Vhimbi Mokode, Deputy Director General: DST, said the case for an increased investment in infrastructure had been made in engagements with National Treasury, and there were instances where they had been convinced, in particular around iThemba Labs in terms of the benefits of their use in cancer treatment, and the DST had received an additional R60 million in budget through persuasion. Regarding the science journalists, there was a successful project with the South African Editor’s Forum, and an initiative with universities to train journalists was currently growing incrementally.

Ms Urszula Rust, Senior Policy Specialist: DST, said the White Paper advocates more collaboration with other departments through interfacing with institutional mechanisms, especially at the local government level, to ensure that STI and innovation was taken up in the local development strategies and provincial departments to prioritise innovation. The Department of Planning Monitoring and Evaluation (DPME) had a framework on technological change which should influence government in the long run, and the DST should influence the budget in that regard. Regarding the jobs versus technology dichotomy, the World Bank Report had reflected that if the country could invest in green innovation, it had the potential to create around 500 000 jobs alone.

The Chairperson said the Portfolio Committee was advocating separate budgets for research and development, as when other departments needed work done by the DST they did not give them enough acknowledgement. She said that this was an exciting draft White Paper, and they were looking forward to the summit on 9 November, which would address all the concerns people had. The fact that a minimum of1.5% of the GDP had to be put aside to address research and development was borne out by the example of South Korea. She hoped the enthusiasm of the President and Deputy President for science and technology, research and development, would encourage and bolster the Committee to move the Department forward.


Amendments to Draft White Paper on Science, Technology and Innovation: Brief overview

The Chairperson asked each member to go through the pages of the draft White Paper with her and note any amendments and recommendations they would like to contribute to enhancie the document and reflect their views.

Mr Koornhof said he had a concern that on Page 20 of the document regarding irregular expenditure, good reasons had been given for it, and suggested explanations should also be included for fruitless expenditure.

Ms Rene Hertsburg: Parliamentary Liaison Officer: DST, said the Department and the entities had explained how they had contravened supply chain management legislation. She was not sure if there had been good reasons for incurring the expenditure, but they had explained it. The Auditor General (AG) had asked the Committee to ensure that they implemented the recommendations of the audit findings to make sure that such instances did not happen again. Regarding the two investigations, these were still pending. She proposed it should remain as it was in the document.

The Chairperson said that all instances of irregular expenditure were as a result of contravening supply chain management legislation. However, the entities had submitted reasons to the AG as a comment added before the CSIR paragraph.

Mr Koornhof said that he remembered there was such a note.

Ms Hertsburg said all irregular information had been accounted for in detail to the AG.

In response to a question from Mr Koornhof that because of the rules, various departments did not ensure enough income was being made by the CSIR, Ms Hertsburg read a statement from page 23, paragraph four, of the document: “Furthermore entities were required to pay and recent Treasury regulations stipulate that memorandums of agreement were no longer accepted to secure remunerated services. Entities now have to submit tender bids for these contracts. In relation to the latter, the CSIR reported a shortfall of R300 million in contract income”.

Mr Koornhof asked if this was being followed by recommendations from the Department after consulting the Treasury, whether these memorandums of agreements could not be re-instituted, as this had had an effect on the CSIR. Was R1.7 billion not being spent because of tender procedures?

Ms Hertsburg said the CSIR had lost R300 million. The target had been to secure R2.1 billion, but when Treasury brought in that change they could secure R1.7 billion of the R2.1 Billion, but the R300 million had resulted in a net loss and not a profit.

Mr Koornhof asked if the Department could not have consultation with Treasury to find out why the money was not spent? He said he wanted the Department to meet with Treasury and explain the reasons for cancelling the memorandums of agreement (MOAs).

The Committee Secretary advised that when the section for recommendations appeared in the document, it could be reflected in that paragraph for an engagement with Treasury, instead of making it two points on the proposed reduction in funding.

Dr S Thembekwayo (EFF) said that on page 25 of the document, the first paragraph elaborates on the involvement of the National Treasury.

The Chairperson quoted the page 25 paragraph verbatim, which mentioned that the Department and the six entities were adequately funded to deliver the mandate.

Ms Mfulo saod that the Portfolio Committee could not say it was enough.

The Chairperson responded that the Committee was challenging Treasury, as the funds were not adequate. It therefore needed to write to Treasury with a timeframe.

Ms Motshidi asked if it would not be better to request a joint sitting.

The Chairperson responded that both processes would be fine, but they would need to stipulate a timeframe to form part of the programme to include any outstanding matters.

She was not sure if there would be any meetings after the State of the Nation Address and the budget review. In the legacy report, the issues would be brought into the document so that in the sixth parliament, the Committee could work on them.

The Secretary read out the adoption of the amendments to the draft report. The DA supported the report, but wanted their comments to be noted when they made the statement.

Mr Koornhof moved adoption of the report, and Ms Motshidi then seconded. The report was adopted.

The meeting was adjourned.

 

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